China’s Cosco to take majority stake in Greece’s Piraeous port, becomes the lone bidder

China's Cosco Group has emerged as the lone bidder for a majority stake in the port of Piraeus in Greece, which is the debt-ridden country's biggest port.

But the Privatisation Fund of Greece has asked Cosco to improve its offer, which will be evaluated in the third week of January. However, the agency did not disclose the value of the existing offer.

Greece is selling 67 percent stake in the Piraeus port, as part of its precondition to fulfil the terms for loans taken from international institutions under the debt alleviation deal, reports AP.

As the leading port in the Mediterranean, Piraeus is strategic and lies to the south of the Greek capital, whch is home to the country’s shipping industry.

The sellout of stake in the port will help cash-strapped Athens to earn hundreds of millions as the Mediterranean port will turn into a logistics hub for Chinese exports to Europe.

Many shortlisted investors—APM Terminals of Denmark and and Philippines-based port operator International Container Terminal Services Inc did not submit bids, reports The Wall Street Journal.

Value of deal

According to insiders, the Cosco transaction would be for 700 million euros (AU$1.08 billion) and will include 350 million euros to be spent on infrastructure investments over the next five years.

According to analysts, Cosco with its strong ties with Greece’s government has been a favourite. It already operates two container terminals in Piraeus on the basis of a 35-year concession in 2009.

Cosco has been using Pireaus as a trans-shipment hub for Asian exports to Europe, mainly for container vessels from China given its proximity to the Suez Canal.

“It’ ​s ​ good news because it strengthens the investment climate in Greece at a difficult time and could generate more investments in rail infrastructure and other ports,” said George Xiradakis, an Athens-based marine-business consultant.

Privatisation drive

In a report, The South China Morning Post said final bids for stake in Piraeus Port were submitted on December 21. But port privatisation in Greek was stalled by the leftist government of Alexis Tsipras in January 2015 though it resumed after the 86 billion euro (AU$134 billion) bailout deal clinched in August. In December, Greece struck another deal of a 1.2 billion euros and leased out an airport to Germany’s Fraport.